If you are thinking of microfinance institution, call it as such – Gideon Boako to government on Women’s Development Bank plans

Deputy Ranking Member on the Finance Committee in Parliament, Gideon Boako, has raised concerns over the government’s commitment to establishing a Women’s Development Bank.

The Mahama administration had reaffirmed its dedication to economic empowerment for women, allocating GHC 51.8 million as seed money for the initiative.

However, Boako questioned whether this amount was sufficient to meet the Bank of Ghana’s minimum capital requirements for establishing a financial institution.

Speaking to newsmen  on Thursday, (13 March) Gideon said, “Remember that President Mahama had promised to establish a Women’s Development Bank. Now, he comes to Parliament and says they have allocated GHC 51.8 million. But what is the minimum capital required for the establishment of a bank? We know it to be GHC 400 million. So how can you establish a bank with 51 million?”

Boako emphasised that banks cannot be established in a piecemeal approach. He argued that financial institutions must meet full capital requirements before receiving a license from the Bank of Ghana.

“Once you go to the Bank of Ghana and say you have established a bank, they will ask to see how much you have in your accounts. The minimum capital required is 400 million cedis. You cannot tell the Bank of Ghana, ‘Oh, I’m putting in a seed money of 50 million, give me the license, and later I’ll build on that.’ It doesn’t happen that way,” he asserted.

According to Boako, government spokesperson Shamima Muslim’s clarification that the proposed institution would be a development finance bank rather than a commercial bank also came under scrutiny.

Boako referenced a Bank of Ghana directive on licensing and capital requirements for development finance institutions, arguing that even under this classification, the allocated funds fell significantly short.

According to the directive, retail development finance institutions require a minimum capital of GHC 600 million, while wholesale institutions need GHC 800 million. The lowest-tier guarantee development finance institutions require at least GHC 300 million —still far above the GHC 51.8 million allocated.

“If they are thinking about a savings and loans company or a microfinance institution, they should call it as such and let people lower their expectations,” Boako remarked.

“But if they are serious about establishing a development finance bank, the figures just don’t add up.”

The debate over the feasibility of the Women’s Development Bank comes amid broader scrutiny of government spending. Boako and other critics have pointed out discrepancies in budget allocations, particularly the GHC 2.7 billion earmarked for the Office of Government Machinery. They argue that while the government claims to be cutting costs, spending on administrative functions remains excessively high.

With calls for greater transparency in budget allocations, stakeholders are urging the Mahama administration to provide a clearer roadmap for funding the Women’s Development Bank and other key initiatives aimed at economic empowerment. Until then, skepticism remains over the feasibility and true intent of the project.